CIOs and Innovation: Stereotypical Disadvantages

CSC believes when companies appoint CIOs without career backgrounds in IT - as so many are latterly wont to do - such appointments are a clear statement that many IT managers have failed to step up to the available business and career opportunities.

"We believe that IT must reverse these perceptions within the next few years or face significant long-term consequences. The ability to be truly bilingual in the language of both business and technology is a good place to start," CSC's report says.

"Innovation is widely seen as the 'job' of the R&D function, and is often confined to product innovation alone. Too often, it is confused with invention or discovery, when it should be about the productive implementation of ideas. Many organizations need a fresh frame of mind - a business and financial model that favours innovation, and has the support of committed sponsors and passionate leaders. Some companies have indeed found that the only way to break out of the straitjacket of cost-dominated thinking is to establish a separate organizational unit within which the creative process can be nurtured.

"Given that technology developments are now enabling businesses to communicate and interconnect with one another much more easily and economically, the CIO should be in the forefront of making innovation happen. But this requires real leadership."

However, Smith says every bit as important as leadership are an inherent interest in taking a look at a business problem and empathy towards the customer experience. Smith thinks the IT industry overall is too inclined to view technology as capable of solving any problem, rather than seeing it as just one ingredient of a solution.

"You could ask me how to bake a cake and I could tell you that you need sugar, butter and flour, but those are just the ingredients," Smith says. "I still have to create a solution and I think that's the real innovation. I think all the ingredients are there - the technology's not a constraint anymore. The only constraint we have is in our heads, and I think spending enough time with external customers and internal customers to understand what problem they're really trying to solve is the real answer.

"Innovation isn't just new products. Innovation is process, advances, different approaches - its kind of unexpected results from unexpected means."

Smith says the real innovators in any organization are those who are humble enough and sharp enough to take advantage of available technology and package it in the right way to deliver a real solution. That is the real skill, he says, as is evidenced by the fact that in the implementation of any package, from SAP to Siebel, there have been huge disasters and equally huge successes.

"The people that are successful are the ones that figure out what the real business problem is and simplify the lives for their customers," Smith says. "And so you can see, you can take the same commodity - it could be an Intel server or it could be a piece of software - and you'll have an equal number of people that make it successful and an equal number that make it a disaster."

Unleash Innovation

However, smart innovative people also need a smart innovative culture, says Eagle Datamation International (EDI) chief executive Richard White, whose company recently won a Consensus Award for its software and picked up a second $10,000 prize by taking out the Microsoft-sponsored Realizing Potential Award for innovation.

White says with only 85 people working for his company, he puts a lot of effort into maintaining an innovative culture, in the belief that all innovation stems from cultural drivers and the "set of ecological circumstances" the organization puts in place to encourage innovation. But he also insists it is important for organizations to recognize that not every company should try to power its engines with innovation.

"First of all you have to understand that innovation doesn't necessarily fit in all companies because not all companies have a need for innovation," White says. "If you're making sausages and you're in the production line, then innovation is probably not a good thing: you want to make a standardized product."

But White says organizations must also be able to distinguish between "creativity" and "innovation". People think about creativity as being about people sitting around thinking big thoughts but not really delivering much. An innovative process, by contrast, involves not only the creation of ideas but the delivery of those ideas in some sort of functional or productized way. And to achieve that, EDI introduced some very structured cultural mechanisms from its inception.

"For instance, if you're making sausages, then you would tend to reward success, that is, good sausages, and penalize failure: spoiled or broken or perhaps some other problem with sausage making. So you reward people that do well, and you penalize those that do bad. If you're an innovator that's probably not going to work, unless it's on a very narrow scale," White says.